EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1105085
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Simcoa Operations Pty Ltd applied for a TCO in respect of certain smoke hood submerged arc furnace hangers on 04 February 2011.
Instrument
TCO No 1105085 was made on 28 April 2011. It declares that those certain smoke hood submerged arc furnace hangers are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 1105085 is taken to have come into force on 04 February 2011.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 1105085, enacted in 2011 under the Customs Act 1901, addresses the need for concessional tariff rates for specific imported goods, in this case certain smoke hood submerged arc furnace hangers, to support domestic industries where substitutable goods are not produced in Australia. The instrument was introduced to facilitate trade by reducing the customs duty on these particular goods from the general rate of 5% to a rate of free, in line with the policy objective of promoting competitive markets and economic efficiency. The instrument was made by the Chief Executive Officer of Customs, following an application by Simcoa Operations Pty Ltd, and was published in the Gazette with no objections received. The instrument came into force on the date the application was lodged, 04 February 2011, and benefits importers by allowing them to apply for a refund of duty on goods imported since that date, without imposing any new liabilities.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. These orders facilitate a reduced rate of customs duty on goods specified within a TCO. The application for such orders is governed by the Act, wherein section 269F allows an individual to apply to the CEO for a TCO concerning particular goods, provided these goods do not fall under the exclusions listed in section 269SJ. If the CEO is satisfied that the application meets the core criteria outlined in section 269C and that no substitutable goods were produced in Australia as per section 269D, an order may be issued. This process was followed when Simcoa Operations Pty Ltd applied for a TCO on certain smoke hood submerged arc furnace hangers, leading to the issuance of TCO No 1105085 on 28 April 2011, which came into force on the date of application, 04 February 2011. The CEO's decision to issue the TCO was made without any submissions received in opposition, following the publication of the application in the Gazette as required by subsection 269K(1) of the Act. The TCO does not disadvantage any person or impose liabilities for actions prior to its registration, benefiting importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The main operative sections of this legislation (F2011L01655) concern the process and criteria for making Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for applications to be made to the Chief Executive Officer (CEO) of Customs for a TCO, provided the goods are not those specified in section 269SJ. The CEO must decide if the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO is required to make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, as per section 269P(3).
The Act imposes specific obligations on the CEO regarding the handling of TCO applications. Once an application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not proceed, as per subsection 269K(1). This ensures transparency and allows for public input before a decision is made. Additionally, the CEO must ensure that the application meets the core criteria before issuing a TCO, which includes verifying that no substitutable goods were produced in Australia on the application date, in line with section 269C.
Failure to comply with the requirements set out in the Act can lead to various consequences. While specific offences and penalties are not detailed in this particular instrument, breaches of the Customs Act 1901 generally can result in civil and criminal penalties. These can include fines, imprisonment, or both, depending on the nature and severity of the breach. For example, knowingly making a false statement in an application could be considered a criminal offence with potential penalties including significant fines and imprisonment. It is important for all parties to adhere to the requirements to avoid these potential consequences.